Senator Max Baucus

Opening Statement

EPW Committee Hearing on SAFETEA

May 20, 2003

Thank you Mr. Chairman.

I would like to welcome Secretary Mineta here today. It has been my privilege to have worked with him when he was a distinguished member of the House and now that he is Secretary of the Department of Transportation.

It’s also a pleasure to see Mary Peters here today. As a former State DOT director, I know that she shares many of the same concerns of my State DOT.

I only wish that we were meeting today under happier circumstances.

SAFETEA, the Transportation Reauthorization proposal from the Bush Administration falls very short of the mark. It is a disappointment on many levels.

Most importantly, the lack of funding. There is not nearly enough money in SAFETEA to fund our transportation system.

The Department of Transportation’s own “2002 Conditions & Performance” report indicates that an annual investment level of $75 billion in highway and transit capital infrastructure is needed in order to begin to improve the condition of the nation’s highways, bridges, and transit systems.

SAFETEA falls woefully short of that number with only $247 billion in funding over 6 years. That’s only $201 billion for highways.

In fact, a quick trip to the Bureau of Labor Statistics CPI inflation calculator says that TEA 21's $217.8 billion in authorizations in 1998 dollars would be worth, in 2003 dollars-- $246.1 billion.

That's a net growth of $1.3 billion over 6 years in inflation-adjusted dollars, or just over one-half of one percent.

This funding level is embarrassing. And it’s problematic for Montana and other states. In Montana, our highway program is our economic development program. TEA 21 alone created 11,000 jobs in my state.

Under SAFETEA Montana doesn’t reach its FY 2003 funding level until after FY 2007. We’re going backwards!

By cutting funding to the states, this bill jeopardizes ability to maintain our highway system and any economic growth that arises from that maintenance.

In addition to the overall funding levels, there are several policy areas that concern me in this proposal.

The first is environmental streamlining, or I should say the lack of streamlining in the program.

I was privileged to be one of the authors of TEA 21. The streamlining sections 1308 and 1309 direct the Secretary of Transportation to find ways to expedite the project approval process and get construction underway faster.

We were very clear--The environment and the environmental reviews should NOT get short shrift! But, we needed to find a way to ensure that projects flow through the pipeline in a timely manner, eliminate unnecessary delays, move faster and with as little paperwork as possible.

I have to tell you Mr. Chairman. I=m was very disappointed when those rules came out in May of 2000. I believe those regulations hit very far from the mark.

Those regulations were supposed to help the State DOTS get their jobs done better and more efficiently--not make their jobs harder.

There was overwhelming criticism from Congress and the states regarding both those rules and the Administration’s last minute effort with an Executive Order. Given all that, I was confident that this USDOT would step up to the plate and do what needed to be done--set deadlines for resource agencies. Give the states some significant authority and name the USDOT as the lead agency when determining purpose and need and scope of alternatives for a project.

Three basic ideas.

SAFETEA disappointed. No deadlines, no state delegation- except for categorical exclusions, which really aren’t the problems-- and no lead agency status for purpose and need.

After those May 2000 rules came out on planning and NEPA, I became convinced that Congress needed to act. We needed to legislate streamlining. Regulations and Executive Orders weren’t cutting it.

That is why I introduced The MEGA Stream ACT last session. Senators Warner, Crapo and Thomas joined me as cosponsors of that bill.

I was hoping to see some of those elements in SAFTEA. On the contrary-- SAFETEA contains added obstructions- like the proposed Section 1609(a) which gives the Department totally new authority to disapprove projects if it finds that the state has not ensured that the proposed project “will consider the preservation, historic, scenic, natural environment, and community values.” Believe me, I’m not against those goals, but we have processes that address these things already. I’m looking for reasonable, carefully crafted streamlining, not new authority for the Department. The states already care about these things and we already have plenty of Federal regulation; we need to streamline what we have.

I am once again disappointed.

This lack of streamlining will jeopardize projects and jeopardize jobs.

I remain committed to the tenets in the MEGA STREAM ACT and urge this Committee to work with me toward those goals.

As Ranking Member of the Senate Finance Committee, I was understandably interested in the Revenue Section.

I was pleased to see that SAFETEA addresses Fuel Tax Evasion. Senator Grassley and I have made huge strides in attempting to structure the fuel tax system to resist different schemes, scams and cons. It is gratifying to see some of our work present in SAFTEA. I am also pleased to see the 2.5 cent ethanol issue dealt with in SAFTEA.

Unfortunately, the losses to the Highway Trust Fund from the ethanol subsidy are not addressed in your proposal. Senator Grassley and I have been working tirelessly with both the renewable fuels industry and the highway community to ensure that the Trust Fund does not get burdened with the ethanol subsidy.

We reached an agreement in March that would simplify the tax code regarding ethanol and ensure that all taxes get paid to the Highway Trust Fund. I am disappointed that this change was not included in SAFETEA.

I am also disappointed that interest was not returned to the Trust Fund in SAFETEA.

As leadership on the Finance Committee, Senator Grassley and I are committed to growing the program under our next highway reauthorization. We are currently working on a proposal that would increase both the highway and transit programs significantly, without raising taxes.

Given the Administration’s aversion to a gas tax increase, Senator Grassley and I would hope to work with the Administration on this alternative proposal, as a way to increase transportation funding.

I see that there are 2 new “core” categories added to the program in SAFETEA.

$2 billion is taken off the top of the current five core highway programs and given to two new programs--safety and “ready-to-go” projects.

I have several concerns about this:

First, in the zero-sum game that is SAFETEA, any money taken from the core programs just means less for those programs to the states.

Second, in terms of the rationale for these two new categories, I would simply say that:

1. My state and others consider safety a priority and have always planned and implemented with that in mind. SAFETEA has new requirements for plans and analyses and reports before any money is apportioned to a state. I think we all are supportive of safety investment, but I believe the entire highway program has safety benefits and we need to increase investment and streamline the program to put safety benefits on the street. Is this new category going to help increase safety or make safety planning and implementation even more burdensome for the states? I think it’s the latter.

2. In the state of Montana, and I know this is true for other states as well, if a project is ready to-go-- it goes! Under my urging, my state DOT gets projects done and spends all our apportionments.

3. We don’t need extra requirements forcing us to get projects out quicker. We need streamlining to help us get projects out quicker. We need more money to do more projects to increase our mobility and create jobs.

So I find it ironic that a $1 billion category is created to move projects quickly when then 2 things we need in order to do that—money and streamlining--are absent from the bill.

I would just like to quickly list some other concerns I have about key provisions in SAFETEA.

RABA continues to be able to be negative. As long as there are cash balances in the Trust Fund, there is no reason RABA should ever be negative. In the MEGA FUND Act introduced in the 107^th Congress, Senator Crapo and I call for a RABA that is driven by funds available rather than a prediction of revenue. I believe that that is the prudent course and I hope that the Committee will work towards that goal.

I am also surprised that an administration that refuses to embrace a gas-tax increase would support the double taxation of highways with a provision that would allow tolling on existing interstates. These highways have already been paid for. This will help to put the trucking industry out of business.

I was also surprised to see that SAFETEA includes a provision that would allow commercialization at rest stops, effectively, putting localities and private truck stops in financial straits.

Yes, it’s true that states desperately need fiscal relief, but not on the backs of cities and of small businessmen.

I know that the propaganda for SAFETEA claimed that it was not making sweeping changes. That it was simply advancing the good ideas in TEA 21. That it was streamlining project delivery and giving states more flexibility.

But in the 391-page single-spaced document I saw, looking for improvements and simplification in those areas was like looking for a needle in a haystack.

I know that Mary Peters and Norm Mineta are longtime highway advocates and allies for a strong highway program. I would like to know where the Mineta/Peters bill is, because I can’t believe this is it.

Thank you Mr. Chairman